Top oil producers agree on ‘historic’ cuts to boost prices
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Top oil-producing countries agreed Sunday on “historic” output cuts in a bid to boost plummeting oil prices due to the new coronavirus crisis and a Russia-Saudi price war.
OPEC producers dominated by Saudi Arabia and allies led by Russia met via videoconference for an hour Sunday in a last effort to cement a deal struck early Friday.
Opec+, made up of oil producers and allies including Russia, announced plans for the deal on 9 April, but Mexico resisted the cuts.
In a compromise reached Sunday, they agreed to a cut of 9.7 million barrels per day from May, according to its Energy Minister Rocio Nahle, down slightly from 10 million barrels per day envisioned earlier.
US President Donald Trump and Kuwait’s energy minister Dr Khaled Ali Mohammed al-Fadhel tweeted the news, while Saudi Arabia’s energy ministry and Russia’s state news agency Tass both separately confirmed the deal on Sunday.
The big Oil Deal with OPEC Plus is done. This will save hundreds of thousands of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office. Great deal for all!
Global oil demand is estimated to have fallen by a third as more than three billion people are locked down in their homes due to the coronavirus outbreak.
Prior to that, oil prices slumped in March to an 18-year-low after Opec+ failed to agree cuts.
Talks were complicated by disagreements between Russia and Saudi Arabia, but on 2 April oil prices surged after President Trump signalled that he expected the two countries to end their feud.
Oil prices jumped on Monday (April 13) after swinging wildly in early trading as investors weighed whether an historic deal by the world’s biggest producers to cut output would be enough to steady a market pummeled by the coronavirus.
Futures in London rose as much as 8 per cent but quickly erased much of those gains as markets opened following a three-day break.
